PROBLEM: Redesign of New Development Orphans Two Retail Units
This was a new residential condominium development. The ground floor street front retail space was owned by a separate interest.
The original plans were changed resulting in one very good retail space and two poor street front retail stores. They were deeply recessed from the main street with poor visibility and poor access. One unit had a low ceiling height. The owner had been marketing these two retail stores for a year with no interest shown. The two retail units were under appeal.
- The extent of effort and the sheer volume of rejection letters by retailers told the story of the problem of the two orphaned stores.
- There was good evidence to support an Equity Value well below its Market Value.
- We stayed in the background by drafting an Offer to Settle for the retail owner, which was rejected by MPAC, the day before the hearing.
- Consequently, we attended the hearing with the owner and the appeal was put over to another hearing.
- The original assessor was replaced with a senior assessor. Based on the “Equity” evidence we provided, MPAC accepted a reduction well below its Market Value.
CONCLUSION: Equity Trumps Market Value
The ultimate question is, “is the assessment fair and equitable with other similar properties?” If the comparable assessments are lower than Market Value, then the resultant assessment will be below Market Value too. This is referred to as Equity.
The following graph compares the Market Value to the much lower Equity assessment:
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